December 1, 2024 • 19 mins
In this wild ride of an episode, we’re peeling back the curtain on the truth about credit cards. You think you’ve got it all under control, right? Swipe, pay, swipe, pay. But, oh man, are you in for a shock. Behind all that smooth marketing and flashy rewards, credit card companies are raking in cash—off your debt. It’s a cycle. A trap. And those “convenient” minimum payments? Yeah, they’ll keep you stuck for years, paying way more than you ever imagined. And don’t even get me started on those rewards programs. They promise you the moon, but what they really offer is just the illusion of value—while you keep sinking deeper into debt.
But hey, it’s not all doom and gloom! There’s light at the end of this credit card tunnel, if you know how to play the game—responsibly, of course. It’s about understanding the mechanics behind the cards. Like, seriously, paying off your balance in full (yes, I said FULL) each month can make all the difference. And avoiding those sneaky fees—don’t get me started on those surprise charges! Oh, and your credit score? Yeah, it’s not just a number, it’s a reflection of your financial health. Don’t ignore it.
We’re not just here to complain about the system. Nope. We’re offering real solutions—practical, actionable strategies that can help you stop living paycheck to paycheck while managing credit cards like a pro. Budgeting? Yup, we’ll talk about how to set that up without pulling your hair out. Tracking spending? It’s easier than you think. And those rewards? We’ll show you how to maximize them without falling into the trap of overspending.
Here’s the kicker—credit cards, when used strategically, can be tools that actually help you grow your wealth. Yes, I said wealth. But only if you stop treating them like magic wands for instant gratification. They’re not. They’re tools. Tools to be used with purpose.
So what are you waiting for? Hit that subscribe button, because you don’t want to miss this one. Let’s flip the script on how you manage your credit cards and start building that financial future, instead of watching it slip away. It’s time to make credit work for you, not the other way around.
NOTICE OF RISK: As always, this content is for educational purposes only. Before making any financial decisions, consult with a professional. Financial strategies vary from person to person, and you should always make informed decisions based on your individual needs.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
All right, let's dive in.
(00:01):
Today we're gonna get into credit cards.
Oh yeah.
We're dissecting this podcast episode
called The Shocking Truth About Credit Cards,
what they don't want you to know.
I mean, we all know that credit cards can be really useful.
But they can also be kind of tricky to navigate.
So our mission today is to unearth some of the secrets
(00:23):
so we can not just survive, but really thrive.
Right, I think people don't realize how much psychology
goes into like how we use credit cards.
Oh, interesting.
Like the companies are really good
at making us wanna spend money without even realizing it.
Whoa, okay, give me an example.
What are they doing?
Well, just like the physical cards,
(00:44):
you know, all those like sleek metallic cards.
Yeah, yeah.
They're designed to make you feel
like you're holding something valuable.
It's almost like a status symbol, you know?
Right.
That just makes us wanna subconsciously spend more.
Yeah, it's like you feel like,
oh, I deserve this.
Exactly, yeah.
And then there's the way they present
like the minimum payments.
Yeah.
It makes it seem like you're barely spending any money.
(01:05):
Right, right.
But in reality, you're racking up
like huge interest charges over time.
It's like they're like using some Jedi mind trick
to make us think that we're spending less than we are.
Yeah, it's very subtle.
Yeah, how do we fight back?
How do we develop a more critical eye?
Well, I think one way is to just understand
like how these companies are making a profit.
(01:27):
Okay.
That podcast we're looking at,
they made this really interesting point.
Yeah.
That credit card companies,
they love it when people only make the minimum payment.
Right.
Because it keeps you in debt longer,
which means more profit for them.
Oh man, so they're banking on us
falling for that minimum payment trap.
Yeah.
Okay, so beyond just knowing how they're doing it,
(01:49):
like what can we actually do to avoid it?
Well, I think it comes down to changing our mindset.
Okay.
Instead of thinking of a credit card as free money,
think of it as a short-term high-interest loan.
And that will help you make smarter decisions
about your spending.
So recognizing that every swipe comes with a price tag.
Exactly.
(02:10):
Even if you don't see it right away.
Yeah.
Okay, so how do we,
what other like concrete steps can we take
to make sure that we're using these cards
to our advantage and not the other way around?
I think one of the biggest ones is just to make a budget
and actually stick to it.
A budget, okay, yeah.
Sounds so basic.
Yeah.
But it's the foundation.
Yeah.
A budget doesn't have to be this strict restrictive thing.
(02:31):
Right.
It's more about having a plan, a roadmap for your money.
Okay, okay.
So with all the budgeting methods out there,
like where do we even start?
Well, that's the thing.
There is no right or wrong answer.
Right.
Some people love that 30, 30, 20 rule.
Others love the envelope system.
Right.
There's tons of apps now too
(02:52):
that you can use to automate it.
Right.
It really just depends on your personality
and your lifestyle.
Okay.
So find something that'll work for you.
Yeah, exactly.
Like no point in doing a budget
if you're not gonna stick with it.
Exactly.
The best budget is the one that works for you.
Right.
And once you have that in place,
Yeah.
you can start to think about,
okay, where does my credit card fit into this?
(03:12):
Right.
So it's not about getting rid of credit cards altogether.
It's about using them intentionally.
Right.
Strategically.
As part of your budget.
Mm-hmm.
Now let's talk about those rewards programs.
Oh yeah.
They always sound so enticing.
Oh yeah, cash back and travel miles and all that stuff.
Yeah, but we really need to understand
how they actually work.
Yeah, cause I always feel like
(03:33):
there's gotta be a catch, right?
You're right to be skeptical.
Okay.
Cause remember, those rewards programs,
they're designed to make you spend more money.
Right.
The more you use your card.
Yeah.
The more the credit card company makes.
Right.
So those rewards are just a way to keep you hooked.
Okay, so it's not just free money
falling from the sky.
No.
(03:53):
What should we be looking for
to make sure we're not getting tricked?
Well think about your spending habits.
Do the rewards actually align with
like where you spend your money anyway?
Okay.
Like if you spend a lot on groceries,
get a card that gives you bonus cash back for groceries.
Okay, yeah, that makes sense.
Don't go out of your way to spending categories.
(04:14):
Yeah.
Just to chase rewards, you know?
Yeah, cause it goes against your budget.
Exactly.
Like, oh, you think you're getting a deal
but you're not really.
Right, yeah.
What else, what are the red flags?
Pay attention to the terms and conditions.
Okay, yeah.
Especially the fine print.
Sometimes those rewards come with restrictions
or they expire.
(04:35):
Right.
And watch out for annual fees too.
Oh yeah.
Those can really eat into your rewards.
Right.
If you're not careful.
It's like they're hiding all the bad stuff
in the fine print, huh?
Yeah, so make sure you read it carefully,
compare different cards.
Right.
Don't be afraid to ask questions.
Right, so do your research.
Yeah.
Be informed.
Exactly.
You're in control, you have the power
(04:56):
to choose what cards you want.
Right.
You want cards that benefit you.
Right.
It all starts with knowing how the game works.
Okay, so we've talked about budgeting.
Right.
We've talked about rewards programs,
we've talked about some of the psychology
behind spending.
But there's one more piece I kinda wanna get to.
Okay.
And that's those hidden fees.
Oh yeah.
(05:16):
They always get, yeah.
The fine print again.
Yeah, it's so easy to just like skip over
all the terms and conditions.
But that's where they hide all those late fees
and foreign transaction fees.
Exactly, all those annual fees, yeah.
That's like they're betting on us not reading it.
Yeah, they are.
So what are the most common ones
we should be watching out for?
(05:38):
Late fees are a big one.
Oh yeah.
You know, you forget a due date.
Yeah.
It happens to the best of us.
Totally.
Setting up a reminder or automating your payments
can save you a lot of money in the long run.
Right, because you forget one since like, damn, 30 bucks.
Exactly.
Yeah.
Okay, what else?
If you travel internationally,
watch out for those foreign transaction fees.
(05:59):
Oh yeah.
They can add up really quickly.
Yeah, for sure.
Some cards waive those fees.
Oh nice.
So that's something to consider if you travel a lot.
Okay, yeah, for sure.
What other sneaky fees are out there?
Annual fees are another one to watch out for.
Yeah.
Some cards offer great perks,
but are those perks worth the annual fee
if you're not even using them?
(06:20):
Right, so analyze your spending.
See if those benefits are actually worth it for you.
Yeah, absolutely.
Okay, so do your research.
Don't be afraid to say no to a fancy car.
Yeah, shop around.
If the fees aren't worth it for you.
Exactly, you have the power to do that.
Wow, this is blowing my mind.
Yeah.
I'm starting to realize how much power we have
(06:42):
as consumers if we just read the fine print.
Absolutely, knowledge is power.
Do a little research and advocate for ourselves
a little bit.
Exactly, and when it comes to credit cards,
a little knowledge can go a long way.
I'm feeling empowered.
We've covered a lot here in part one of our deep dive
from the psychology of how we spend money
to the importance of budgeting,
(07:04):
to understanding all these fees and rewards programs
and the fine print and all that stuff.
It's a lot.
Before we move on to part two,
I have a question for our listeners.
Okay.
Think about your own credit cards.
Are you using them or are they using you?
That's a great question.
Think about your habits.
Think about what you know about your cards.
(07:24):
Think about how you're managing this piece of plastic.
Absolutely.
It can be so powerful.
Very powerful.
We'll dive deeper into these questions in part two.
Yeah.
We'll explore some more advanced strategies
for using those cards to your advantage.
Okay, that sounds good.
And really boosting your financial well-being.
I'm excited.
(07:45):
Yeah.
It's interesting, right?
As we go deeper with these credit cards,
it's like how much psychology plays a part in?
Like how we spend.
Yeah, it's like some things just telling you to buy, buy, buy.
Exactly.
And one of those is like what's called delayed gratification.
Okay.
With cash, you feel the pain of spending it like right away.
(08:05):
Yeah, yeah.
With credit cards, it's like, oh, that pain comes later.
Right, when the bill comes.
Exactly.
So your brain's kind of tricking you
into thinking it's not real money yet.
Oh, so we're just living in denial.
In a way, yeah.
And credit card companies, they know how to exploit that.
Okay, so how are they doing that?
Well, think about those ads you see online.
You know, they're like targeted
(08:26):
to what you were just looking at.
Yeah, yeah, yeah.
Or those limited time offers, you know,
that make you feel like you gotta buy it right now.
Yeah, like you're gonna miss out.
Exactly, that FOMO, right?
Yeah, yeah.
There's this whole like reward pathway in your brain.
Yeah, okay.
So anytime you buy something,
especially something you want,
like your brain's releasing dopamine.
Oh, wow.
And it's like, you get rewarded for spending.
(08:48):
So it's like the rewards programs
are kind of like tapping into that.
Like points and miles are like little dopamine hits.
Exactly, marketers know this.
Yeah.
It's pretty smart, but also kind of manipulative.
Yeah, for sure.
So knowing all that, how do we fight back against it?
How do we become more mindful?
Well, I think one way is to be aware
(09:10):
of your spending triggers.
Oh, okay.
Like what situations or emotions make you spend more?
Okay.
Is it stress, boredom, social pressure?
I know for me, when I'm down or I'm stressed, I just shop.
Yeah, that's a really common one.
That's like retail therapy.
Right, so once you know what those triggers are,
you can start to like find other ways to deal with them.
(09:32):
Okay.
Instead of shopping, maybe go for a walk or call a friend.
All right, so find healthier ways
to deal with your emotions.
Exactly, and I think it's really helpful
to like create visual reminders of your financial goals.
Okay.
Like a picture of the vacation you're saving up for,
or like a chart of your debt payoff progress.
Okay.
I think that somewhere you can see it,
like on your fridge, on your phone.
It's like your little cheerleader.
(09:53):
Yeah.
Keeping you motivated.
Exactly, and there's this powerful technique.
Yeah.
Called implementation intention.
Okay.
Where you basically plan ahead of time.
Okay.
So you're gonna handle like those tempting situations.
Oh, okay, so do me an example.
So let's say you know you're more likely
to shop online when you're bored.
(10:13):
Right.
Your implementation intention could be like,
okay, if I find myself online shopping,
I'm gonna close that window,
and I'm gonna go for a walk for 15 minutes.
So it's like having a plan in place.
Yeah.
So you don't have to think about it in the moment.
Exactly.
You're not gonna like get swept away.
Right, it helps break that cycle.
That's cool, I like that.
(10:34):
All right, so mindfulness, visual reminders.
Yes.
Implementation intentions, those are good.
But how about some practical stuff?
Like how do we make a budget?
Oh, budgeting, yes.
That actually works.
That's essential.
Yeah.
It's a foundation.
Yeah.
And the good news is, it doesn't have to be complicated.
Right.
There's so many methods out there,
(10:55):
you can find one that works for you.
Right, because the best budget's the one
you're gonna stick with.
Exactly, you got it.
Some people like that 50-30-20 method.
Some people like the envelope system.
Yeah.
And then there's all these amazing budgeting apps.
Oh, yeah.
That can automate it for you.
Yeah.
So you really just gotta find what works for you.
Right, find something that makes it easy
and not stressful.
Exactly, exactly.
(11:16):
And once you have that budget,
then you can actually start looking
at your credit card statements.
Okay, yeah.
And don't just look at the minimum payment due,
like actually look at the transactions.
Yeah, yeah.
Make sure you recognize them all.
Right, yeah, make sure you actually spent that.
Yeah, you can catch errors, fraudulent charges,
right, or sometimes you get those sneaky little subscriptions
that you forget about.
Exactly, yeah.
(11:37):
And it makes you think about like,
your spending habits,
are you overspending in any category?
Right, so being more mindful.
Exactly, being proactive.
Here's a tip that I think people don't always know.
Okay.
You can actually use a credit card
for like your recurring bills.
Oh, interesting, okay.
Like your utilities or your streaming services.
(11:58):
That way you can get those reward points.
No.
But here's the thing.
What's the catch?
You gotta make sure you're paying it off every month.
Right, because otherwise you're just gonna
pay all the interest.
Yeah, exactly.
And negate any rewards that you get.
Exactly, so it's all about being disciplined,
you know, and using it to your advantage.
Okay, what other strategies like that
are there to like, maximize our benefits?
(12:20):
So there's this thing called balance transferring.
Okay.
Where you basically take debt from a high interest card
and move it to a card with a lower interest rate.
Okay.
And you can do one with like a 0% APR for a while.
Oh, that sounds like a good deal.
Yeah.
You're just gonna.
You're always gonna read the fine print, right?
Yeah.
Sometimes there are balance transfer fees
(12:40):
or that 0% APR might not last forever.
But if you're smart about it, you can save money.
So do your research.
Make sure the math makes sense.
Yes.
For you.
Exactly, and now for the like,
really strategic people out there.
Oh, okay, let's hear it.
There's this thing called credit card churning.
Okay.
You basically sign up for cards
(13:02):
that have really good sign up bonuses.
Okay.
You meet the spending requirements
and then you cancel it.
Right, before the annual fee kicks in.
Exactly.
Wow, okay, is that even allowed?
Oh yeah, it's totally legal and ethical.
Okay.
But it's not for everybody.
Right.
It takes a lot of organization.
Yeah.
And you gotta really understand how it all works.
Yeah.
But for those people who are willing to put in the effort,
(13:23):
you can get like free flights, free hotel stays.
Wow.
So it's like a game for the like,
the credit card exports.
Yeah.
The people who know how to play the system.
Yeah.
But with all these like advanced strategies,
do your research.
Make sure it's the right move for you.
But let's, before we get into part three,
let's go back to like the basics.
(13:45):
Okay, back to the fundamentals.
We talked about all these fancy techniques.
Yeah.
But what are like the core principles
that everybody should know?
Okay, so here are a few like golden rules.
All right, let's hear them.
Number one, treat your credit card like it's a debit card.
Okay.
Only spend money you actually have.
Right.
So you're not tempted to overspend.
(14:05):
Exactly.
Number two, pay it off in full every month.
Okay.
That way you avoid the interest charges.
Right.
Number three, track your spending.
Use a budgeting app, a spreadsheet,
whatever works for you.
Yeah.
But you gotta be aware where your money's going.
Right.
Track it all.
Exactly.
Number four, read the fine print.
Ugh, the fine print.
(14:25):
I know, nobody likes it.
Yeah.
But you gotta understand those interest rates,
those fees.
Yeah, those sneaky fees.
Exactly.
And number five, check your credit report regularly.
Okay, yeah.
Make sure there's no mistakes or fraud going on.
Okay, so good basic guidelines.
Yeah, keep it simple.
Simple but effective.
Exactly.
If you can stick to these, you're gonna be golden.
(14:47):
I love it.
Back to basics with a deeper understanding.
All right, we've covered a lot of ground here in part two.
We have.
The psychology of spending to these more advanced techniques,
like balance transferring, credit card churning,
and those core principles
of just using credit cards responsibly.
(15:08):
Right.
Ready for part three.
Let's do it.
All right, we're back.
Here we are.
For the final part of our credit card deep dive.
The grand finale.
It's been quite a journey, hasn't it?
I think we have, yeah.
I feel like we've covered so much from like,
how our brains work when we're spending
to like those really like advanced credit card techniques.
(15:31):
The tricks of the trade.
Yeah, balance transferring, credit card churning.
All that stuff.
I think the big takeaway for everybody listening is,
you know, knowledge is power, right?
Absolutely, the more you know.
Yeah.
The better decisions you can make.
Right, you can avoid those like traps and pitfalls.
Exactly.
That we were talking about before.
Yeah.
I think a lot of people get like overwhelmed, you know.
(15:51):
When it comes to credit cards, all the information.
There's so much out there.
Yeah, but if you just take the time.
Yeah.
To learn about it.
Yeah.
Like interest rates, fees, rewards programs.
Yeah.
How it all affects your credit score.
Yeah.
It can really make a difference.
It's like a superpower almost.
It is, it's like having a secret weapon.
Yeah, and you know, I think it's important to remember
(16:14):
that there are resources out there.
Yes, absolutely.
That help you along the way.
Yeah, there are websites, podcasts like ours.
Yeah.
Even like financial advisors.
Yeah.
Who can give you advice?
So yeah, don't be afraid to ask questions.
Mm-hmm.
Do your research.
Mm-hmm.
Talk to people you trust.
Exactly.
You know, there's no shame in not knowing everything.
(16:36):
Absolutely not.
In fact, that's the first step.
Yeah.
To becoming like more informed.
More in control of your finances.
Right.
Okay, I wanna like shift gears a little bit.
And talk about the bigger picture.
Right.
You know, we've been like really focused on like
the nitty-gritty details of like
how to manage your credit cards.
(16:57):
But credit cards, they're just like one part.
Right.
Of your overall financial situation.
That's all connected.
Yeah, they're a tool.
Yeah, like a hammer.
You can use it to build something or to break something.
Oh, definitely, you gotta use in the right way.
Yeah, so I want you to like think about your financial goals.
Like what are you working towards?
Yeah.
(17:17):
Are you saving for a house?
Are you thinking about retirement?
Yeah.
Or do you just wanna feel more financially secure?
Right, those are big questions.
They are big questions, but they're important.
Yeah.
And once you have a better idea.
Yeah.
Of what you want.
Then you can start to figure out.
Yeah.
Like are your credit cards helping you get there?
(17:39):
Right, are they working for you or against you?
It's exactly.
It's a little check in, you know.
Yeah, make sure you're still on track.
Exactly.
And if you realize.
Yeah.
That your credit card habits aren't really serving you.
Yeah.
So you're really afraid to make a change.
Right.
Like go back to your budget, look at different credit cards,
maybe talk to a financial advisor.
Yeah, it's never too late.
Never too late.
(18:00):
To like take control of your money.
Exactly.
And like create a brighter financial future.
Absolutely.
Okay, before we wrap things up here.
Yeah.
I wanna leave everyone with like one final thought.
Okay, let's hear it.
This journey to like being good with money.
It's a journey.
(18:20):
It's a destination.
It's about constantly like learning and growing.
Right, it's not about being perfect.
It's about making progress.
Exactly, so keep learning, stay curious.
Yeah, keep that growth mindset.
Exactly.
All right, this has been a fascinating deep dive.
It really has, yeah.
I think we've given everyone a lot to think about.
Lots to chew on.
(18:41):
We covered, you know, the psychology of spending
to some of those advanced strategies
and how to make sure your credit cards are like
supporting your goals.
Absolutely.
So to everyone listening, keep exploring.
Yes.
Keep experimenting.
Yeah.
Figure out what works best for you.
Exactly, your journey is unique.
(19:03):
Yeah, there's no one size fits all.
Right.
Thanks for joining us on this deep dive.
Thanks everyone.
And until next time.
See you then.
Stay curious and keep learning.
All right, let's dive in.
(00:01):
Today we're gonna get into credit cards.
Oh yeah.
We're dissecting this podcast episode
called The Shocking Truth About Credit Cards,
what they don't want you to know.
I mean, we all know that credit cards can be really useful.
But they can also be kind of tricky to navigate.
So our mission today is to unearth some of the secrets
(00:23):
so we can not just survive, but really thrive.
Right, I think people don't realize how much psychology
goes into like how we use credit cards.
Oh, interesting.
Like the companies are really good
at making us wanna spend money without even realizing it.
Whoa, okay, give me an example.
What are they doing?
Well, just like the physical cards,
(00:44):
you know, all those like sleek metallic cards.
Yeah, yeah.
They're designed to make you feel
like you're holding something valuable.
It's almost like a status symbol, you know?
Right.
That just makes us wanna subconsciously spend more.
Yeah, it's like you feel like,
oh, I deserve this.
Exactly, yeah.
And then there's the way they present
like the minimum payments.
Yeah.
It makes it seem like you're barely spending any money.
(01:05):
Right, right.
But in reality, you're racking up
like huge interest charges over time.
It's like they're like using some Jedi mind trick
to make us think that we're spending less than we are.
Yeah, it's very subtle.
Yeah, how do we fight back?
How do we develop a more critical eye?
Well, I think one way is to just understand
like how these companies are making a profit.
(01:27):
Okay.
That podcast we're looking at,
they made this really interesting point.
Yeah.
That credit card companies,
they love it when people only make the minimum payment.
Right.
Because it keeps you in debt longer,
which means more profit for them.
Oh man, so they're banking on us
falling for that minimum payment trap.
Yeah.
Okay, so beyond just knowing how they're doing it,
(01:49):
like what can we actually do to avoid it?
Well, I think it comes down to changing our mindset.
Okay.
Instead of thinking of a credit card as free money,
think of it as a short-term high-interest loan.
And that will help you make smarter decisions
about your spending.
So recognizing that every swipe comes with a price tag.
Exactly.
(02:10):
Even if you don't see it right away.
Yeah.
Okay, so how do we,
what other like concrete steps can we take
to make sure that we're using these cards
to our advantage and not the other way around?
I think one of the biggest ones is just to make a budget
and actually stick to it.
A budget, okay, yeah.
Sounds so basic.
Yeah.
But it's the foundation.
Yeah.
A budget doesn't have to be this strict restrictive thing.
(02:31):
Right.
It's more about having a plan, a roadmap for your money.
Okay, okay.
So with all the budgeting methods out there,
like where do we even start?
Well, that's the thing.
There is no right or wrong answer.
Right.
Some people love that 30, 30, 20 rule.
Others love the envelope system.
Right.
There's tons of apps now too
(02:52):
that you can use to automate it.
Right.
It really just depends on your personality
and your lifestyle.
Okay.
So find something that'll work for you.
Yeah, exactly.
Like no point in doing a budget
if you're not gonna stick with it.
Exactly.
The best budget is the one that works for you.
Right.
And once you have that in place,
Yeah.
you can start to think about,
okay, where does my credit card fit into this?
(03:12):
Right.
So it's not about getting rid of credit cards altogether.
It's about using them intentionally.
Right.
Strategically.
As part of your budget.
Mm-hmm.
Now let's talk about those rewards programs.
Oh yeah.
They always sound so enticing.
Oh yeah, cash back and travel miles and all that stuff.
Yeah, but we really need to understand
how they actually work.
Yeah, cause I always feel like
(03:33):
there's gotta be a catch, right?
You're right to be skeptical.
Okay.
Cause remember, those rewards programs,
they're designed to make you spend more money.
Right.
The more you use your card.
Yeah.
The more the credit card company makes.
Right.
So those rewards are just a way to keep you hooked.
Okay, so it's not just free money
falling from the sky.
No.
(03:53):
What should we be looking for
to make sure we're not getting tricked?
Well think about your spending habits.
Do the rewards actually align with
like where you spend your money anyway?
Okay.
Like if you spend a lot on groceries,
get a card that gives you bonus cash back for groceries.
Okay, yeah, that makes sense.
Don't go out of your way to spending categories.
(04:14):
Yeah.
Just to chase rewards, you know?
Yeah, cause it goes against your budget.
Exactly.
Like, oh, you think you're getting a deal
but you're not really.
Right, yeah.
What else, what are the red flags?
Pay attention to the terms and conditions.
Okay, yeah.
Especially the fine print.
Sometimes those rewards come with restrictions
or they expire.
(04:35):
Right.
And watch out for annual fees too.
Oh yeah.
Those can really eat into your rewards.
Right.
If you're not careful.
It's like they're hiding all the bad stuff
in the fine print, huh?
Yeah, so make sure you read it carefully,
compare different cards.
Right.
Don't be afraid to ask questions.
Right, so do your research.
Yeah.
Be informed.
Exactly.
You're in control, you have the power
(04:56):
to choose what cards you want.
Right.
You want cards that benefit you.
Right.
It all starts with knowing how the game works.
Okay, so we've talked about budgeting.
Right.
We've talked about rewards programs,
we've talked about some of the psychology
behind spending.
But there's one more piece I kinda wanna get to.
Okay.
And that's those hidden fees.
Oh yeah.
(05:16):
They always get, yeah.
The fine print again.
Yeah, it's so easy to just like skip over
all the terms and conditions.
But that's where they hide all those late fees
and foreign transaction fees.
Exactly, all those annual fees, yeah.
That's like they're betting on us not reading it.
Yeah, they are.
So what are the most common ones
we should be watching out for?
(05:38):
Late fees are a big one.
Oh yeah.
You know, you forget a due date.
Yeah.
It happens to the best of us.
Totally.
Setting up a reminder or automating your payments
can save you a lot of money in the long run.
Right, because you forget one since like, damn, 30 bucks.
Exactly.
Yeah.
Okay, what else?
If you travel internationally,
watch out for those foreign transaction fees.
(05:59):
Oh yeah.
They can add up really quickly.
Yeah, for sure.
Some cards waive those fees.
Oh nice.
So that's something to consider if you travel a lot.
Okay, yeah, for sure.
What other sneaky fees are out there?
Annual fees are another one to watch out for.
Yeah.
Some cards offer great perks,
but are those perks worth the annual fee
if you're not even using them?
(06:20):
Right, so analyze your spending.
See if those benefits are actually worth it for you.
Yeah, absolutely.
Okay, so do your research.
Don't be afraid to say no to a fancy car.
Yeah, shop around.
If the fees aren't worth it for you.
Exactly, you have the power to do that.
Wow, this is blowing my mind.
Yeah.
I'm starting to realize how much power we have
(06:42):
as consumers if we just read the fine print.
Absolutely, knowledge is power.
Do a little research and advocate for ourselves
a little bit.
Exactly, and when it comes to credit cards,
a little knowledge can go a long way.
I'm feeling empowered.
We've covered a lot here in part one of our deep dive
from the psychology of how we spend money
to the importance of budgeting,
(07:04):
to understanding all these fees and rewards programs
and the fine print and all that stuff.
It's a lot.
Before we move on to part two,
I have a question for our listeners.
Okay.
Think about your own credit cards.
Are you using them or are they using you?
That's a great question.
Think about your habits.
Think about what you know about your cards.
(07:24):
Think about how you're managing this piece of plastic.
Absolutely.
It can be so powerful.
Very powerful.
We'll dive deeper into these questions in part two.
Yeah.
We'll explore some more advanced strategies
for using those cards to your advantage.
Okay, that sounds good.
And really boosting your financial well-being.
I'm excited.
(07:45):
Yeah.
It's interesting, right?
As we go deeper with these credit cards,
it's like how much psychology plays a part in?
Like how we spend.
Yeah, it's like some things just telling you to buy, buy, buy.
Exactly.
And one of those is like what's called delayed gratification.
Okay.
With cash, you feel the pain of spending it like right away.
(08:05):
Yeah, yeah.
With credit cards, it's like, oh, that pain comes later.
Right, when the bill comes.
Exactly.
So your brain's kind of tricking you
into thinking it's not real money yet.
Oh, so we're just living in denial.
In a way, yeah.
And credit card companies, they know how to exploit that.
Okay, so how are they doing that?
Well, think about those ads you see online.
You know, they're like targeted
(08:26):
to what you were just looking at.
Yeah, yeah, yeah.
Or those limited time offers, you know,
that make you feel like you gotta buy it right now.
Yeah, like you're gonna miss out.
Exactly, that FOMO, right?
Yeah, yeah.
There's this whole like reward pathway in your brain.
Yeah, okay.
So anytime you buy something,
especially something you want,
like your brain's releasing dopamine.
Oh, wow.
And it's like, you get rewarded for spending.
(08:48):
So it's like the rewards programs
are kind of like tapping into that.
Like points and miles are like little dopamine hits.
Exactly, marketers know this.
Yeah.
It's pretty smart, but also kind of manipulative.
Yeah, for sure.
So knowing all that, how do we fight back against it?
How do we become more mindful?
Well, I think one way is to be aware
(09:10):
of your spending triggers.
Oh, okay.
Like what situations or emotions make you spend more?
Okay.
Is it stress, boredom, social pressure?
I know for me, when I'm down or I'm stressed, I just shop.
Yeah, that's a really common one.
That's like retail therapy.
Right, so once you know what those triggers are,
you can start to like find other ways to deal with them.
(09:32):
Okay.
Instead of shopping, maybe go for a walk or call a friend.
All right, so find healthier ways
to deal with your emotions.
Exactly, and I think it's really helpful
to like create visual reminders of your financial goals.
Okay.
Like a picture of the vacation you're saving up for,
or like a chart of your debt payoff progress.
Okay.
I think that somewhere you can see it,
like on your fridge, on your phone.
It's like your little cheerleader.
(09:53):
Yeah.
Keeping you motivated.
Exactly, and there's this powerful technique.
Yeah.
Called implementation intention.
Okay.
Where you basically plan ahead of time.
Okay.
So you're gonna handle like those tempting situations.
Oh, okay, so do me an example.
So let's say you know you're more likely
to shop online when you're bored.
(10:13):
Right.
Your implementation intention could be like,
okay, if I find myself online shopping,
I'm gonna close that window,
and I'm gonna go for a walk for 15 minutes.
So it's like having a plan in place.
Yeah.
So you don't have to think about it in the moment.
Exactly.
You're not gonna like get swept away.
Right, it helps break that cycle.
That's cool, I like that.
(10:34):
All right, so mindfulness, visual reminders.
Yes.
Implementation intentions, those are good.
But how about some practical stuff?
Like how do we make a budget?
Oh, budgeting, yes.
That actually works.
That's essential.
Yeah.
It's a foundation.
Yeah.
And the good news is, it doesn't have to be complicated.
Right.
There's so many methods out there,
(10:55):
you can find one that works for you.
Right, because the best budget's the one
you're gonna stick with.
Exactly, you got it.
Some people like that 50-30-20 method.
Some people like the envelope system.
Yeah.
And then there's all these amazing budgeting apps.
Oh, yeah.
That can automate it for you.
Yeah.
So you really just gotta find what works for you.
Right, find something that makes it easy
and not stressful.
Exactly, exactly.
(11:16):
And once you have that budget,
then you can actually start looking
at your credit card statements.
Okay, yeah.
And don't just look at the minimum payment due,
like actually look at the transactions.
Yeah, yeah.
Make sure you recognize them all.
Right, yeah, make sure you actually spent that.
Yeah, you can catch errors, fraudulent charges,
right, or sometimes you get those sneaky little subscriptions
that you forget about.
Exactly, yeah.
(11:37):
And it makes you think about like,
your spending habits,
are you overspending in any category?
Right, so being more mindful.
Exactly, being proactive.
Here's a tip that I think people don't always know.
Okay.
You can actually use a credit card
for like your recurring bills.
Oh, interesting, okay.
Like your utilities or your streaming services.
(11:58):
That way you can get those reward points.
No.
But here's the thing.
What's the catch?
You gotta make sure you're paying it off every month.
Right, because otherwise you're just gonna
pay all the interest.
Yeah, exactly.
And negate any rewards that you get.
Exactly, so it's all about being disciplined,
you know, and using it to your advantage.
Okay, what other strategies like that
are there to like, maximize our benefits?
(12:20):
So there's this thing called balance transferring.
Okay.
Where you basically take debt from a high interest card
and move it to a card with a lower interest rate.
Okay.
And you can do one with like a 0% APR for a while.
Oh, that sounds like a good deal.
Yeah.
You're just gonna.
You're always gonna read the fine print, right?
Yeah.
Sometimes there are balance transfer fees
(12:40):
or that 0% APR might not last forever.
But if you're smart about it, you can save money.
So do your research.
Make sure the math makes sense.
Yes.
For you.
Exactly, and now for the like,
really strategic people out there.
Oh, okay, let's hear it.
There's this thing called credit card churning.
Okay.
You basically sign up for cards
(13:02):
that have really good sign up bonuses.
Okay.
You meet the spending requirements
and then you cancel it.
Right, before the annual fee kicks in.
Exactly.
Wow, okay, is that even allowed?
Oh yeah, it's totally legal and ethical.
Okay.
But it's not for everybody.
Right.
It takes a lot of organization.
Yeah.
And you gotta really understand how it all works.
Yeah.
But for those people who are willing to put in the effort,
(13:23):
you can get like free flights, free hotel stays.
Wow.
So it's like a game for the like,
the credit card exports.
Yeah.
The people who know how to play the system.
Yeah.
But with all these like advanced strategies,
do your research.
Make sure it's the right move for you.
But let's, before we get into part three,
let's go back to like the basics.
(13:45):
Okay, back to the fundamentals.
We talked about all these fancy techniques.
Yeah.
But what are like the core principles
that everybody should know?
Okay, so here are a few like golden rules.
All right, let's hear them.
Number one, treat your credit card like it's a debit card.
Okay.
Only spend money you actually have.
Right.
So you're not tempted to overspend.
(14:05):
Exactly.
Number two, pay it off in full every month.
Okay.
That way you avoid the interest charges.
Right.
Number three, track your spending.
Use a budgeting app, a spreadsheet,
whatever works for you.
Yeah.
But you gotta be aware where your money's going.
Right.
Track it all.
Exactly.
Number four, read the fine print.
Ugh, the fine print.
(14:25):
I know, nobody likes it.
Yeah.
But you gotta understand those interest rates,
those fees.
Yeah, those sneaky fees.
Exactly.
And number five, check your credit report regularly.
Okay, yeah.
Make sure there's no mistakes or fraud going on.
Okay, so good basic guidelines.
Yeah, keep it simple.
Simple but effective.
Exactly.
If you can stick to these, you're gonna be golden.
(14:47):
I love it.
Back to basics with a deeper understanding.
All right, we've covered a lot of ground here in part two.
We have.
The psychology of spending to these more advanced techniques,
like balance transferring, credit card churning,
and those core principles
of just using credit cards responsibly.
(15:08):
Right.
Ready for part three.
Let's do it.
All right, we're back.
Here we are.
For the final part of our credit card deep dive.
The grand finale.
It's been quite a journey, hasn't it?
I think we have, yeah.
I feel like we've covered so much from like,
how our brains work when we're spending
to like those really like advanced credit card techniques.
(15:31):
The tricks of the trade.
Yeah, balance transferring, credit card churning.
All that stuff.
I think the big takeaway for everybody listening is,
you know, knowledge is power, right?
Absolutely, the more you know.
Yeah.
The better decisions you can make.
Right, you can avoid those like traps and pitfalls.
Exactly.
That we were talking about before.
Yeah.
I think a lot of people get like overwhelmed, you know.
(15:51):
When it comes to credit cards, all the information.
There's so much out there.
Yeah, but if you just take the time.
Yeah.
To learn about it.
Yeah.
Like interest rates, fees, rewards programs.
Yeah.
How it all affects your credit score.
Yeah.
It can really make a difference.
It's like a superpower almost.
It is, it's like having a secret weapon.
Yeah, and you know, I think it's important to remember
(16:14):
that there are resources out there.
Yes, absolutely.
That help you along the way.
Yeah, there are websites, podcasts like ours.
Yeah.
Even like financial advisors.
Yeah.
Who can give you advice?
So yeah, don't be afraid to ask questions.
Mm-hmm.
Do your research.
Mm-hmm.
Talk to people you trust.
Exactly.
You know, there's no shame in not knowing everything.
(16:36):
Absolutely not.
In fact, that's the first step.
Yeah.
To becoming like more informed.
More in control of your finances.
Right.
Okay, I wanna like shift gears a little bit.
And talk about the bigger picture.
Right.
You know, we've been like really focused on like
the nitty-gritty details of like
how to manage your credit cards.
(16:57):
But credit cards, they're just like one part.
Right.
Of your overall financial situation.
That's all connected.
Yeah, they're a tool.
Yeah, like a hammer.
You can use it to build something or to break something.
Oh, definitely, you gotta use in the right way.
Yeah, so I want you to like think about your financial goals.
Like what are you working towards?
Yeah.
(17:17):
Are you saving for a house?
Are you thinking about retirement?
Yeah.
Or do you just wanna feel more financially secure?
Right, those are big questions.
They are big questions, but they're important.
Yeah.
And once you have a better idea.
Yeah.
Of what you want.
Then you can start to figure out.
Yeah.
Like are your credit cards helping you get there?
(17:39):
Right, are they working for you or against you?
It's exactly.
It's a little check in, you know.
Yeah, make sure you're still on track.
Exactly.
And if you realize.
Yeah.
That your credit card habits aren't really serving you.
Yeah.
So you're really afraid to make a change.
Right.
Like go back to your budget, look at different credit cards,
maybe talk to a financial advisor.
Yeah, it's never too late.
Never too late.
(18:00):
To like take control of your money.
Exactly.
And like create a brighter financial future.
Absolutely.
Okay, before we wrap things up here.
Yeah.
I wanna leave everyone with like one final thought.
Okay, let's hear it.
This journey to like being good with money.
It's a journey.
(18:20):
It's a destination.
It's about constantly like learning and growing.
Right, it's not about being perfect.
It's about making progress.
Exactly, so keep learning, stay curious.
Yeah, keep that growth mindset.
Exactly.
All right, this has been a fascinating deep dive.
It really has, yeah.
I think we've given everyone a lot to think about.
Lots to chew on.
(18:41):
We covered, you know, the psychology of spending
to some of those advanced strategies
and how to make sure your credit cards are like
supporting your goals.
Absolutely.
So to everyone listening, keep exploring.
Yes.
Keep experimenting.
Yeah.
Figure out what works best for you.
Exactly, your journey is unique.
(19:03):
Yeah, there's no one size fits all.
Right.
Thanks for joining us on this deep dive.
Thanks everyone.
And until next time.
See you then.
Stay curious and keep learning.
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